Who: Kingstown Associates Limited (Kingstown), National Trading Standards and the Advertising Standards Authority (ASA)
Where: United Kingdom
When: 21 January 2020
Law stated as at: 29 January 2020
Kingstown was found guilty of “banned practices” under the Consumer Protection from Unfair Trading Regulations 2008 for giving the impression in two promotional mailings that entrants would definitely receive a particular prize, when that was not the case. Kingstown was fined £150,000 and ordered to pay costs of £10,763.84, as well as a victim surcharge of £170, as a result of the case.
Consumers had to purchase products from Kingstown in order to enter, which wasn’t clear from Kingstown’s promotional mailings. In addition, Kingstown claimed that winners would receive a share of tens of thousands of pounds, when in fact each winner received only £0.91 (having had to bear the cost of purchasing a Kingstown product to enter).
Trading Standards stated that Kingstown had purposefully targeted its scam promotional mailings at elderly people and deliberately misled them for financial gain.
The ASA had previously banned the company’s misleading promotional mailings in 2011 and 2017, but Kingstown had failed to make adequate improvements.
Why this matters:
The hefty fine of £150,000 sends a clear warning signal to businesses that their promotions must comply with the Consumer Protection from Unfair Trading Regulations 2008, as well as relevant guidance. The fine also shows that Trading Standards will investigate and prosecute instances of businesses misleading consumers by giving false information and that an ASA upheld ruling is not the only risk when running a non-compliant promotion.